Economics 9708 · AS & A Level · Fiscal policy

Fiscal policy — practice question

The diagram provides information on the British Government’s projected expenditure and receipts for 2010–2011. All figures are in UK £bn. What conclusion can be drawn from the diagram?

  • Aeffect of largest spending item on income distribution: less equitable; type of largest receipt item: indirect tax; overall budget balance: deficit
  • Beffect of largest spending item on income distribution: less equitable; type of largest receipt item: indirect tax; overall budget balance: surplus
  • Ceffect of largest spending item on income distribution: more equitable; type of largest receipt item: direct tax; overall budget balance: deficit
  • Deffect of largest spending item on income distribution: more equitable; type of largest receipt item: direct tax; overall budget balance: surplus

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